The use of compensation components as a key talent retention tool: The case of BMS Limited

This study explores how a company uses its compensation components to create an environment which encourages highly skilled employees to stay with them for a long period of time. Literature on compensation exploring its direct impacts on retention has been scarce, while retaining key competencies has become crucial for companies operating in highly competitive and globalized labor markets, where human capital represents an asset and a competitive advantage for employers. In understanding how compensation components foster an employee’s intention to stay within a firm, data was generated during semi structured interviews conducted with employees at the study company BMS Limited. Results were categorized into four dimensions. One: the compensation system of BMS Limited consists of direct payments, incentives & rewards, allowances, benefits and work environment, corresponding with literature; two: the firm’s strengths lie in it offering flexibility, work from home and language courses, and its weaknesses in the base salary; three: the employees are generally happy with the compensation, wishing for social aspects, communication, work from home, and bonuses to improve, and additionally for the employer to consider offering them additional cost decreasing measures, extensive benefits, paid certification training or private pension plans. These findings suggest that each compensation component has a direct impact on retention by incentivizing, rewarding and encouraging employees in delivering grand performance, by enabling them to develop, care for their wellbeing and satisfy personal needs while being employed; besides compensation, good team dynamics, the right management and meaningful work can make or break a long term employment relationship